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Senate budget plan would slash local aid

Proposal does not include tax raises

By Matt Viser
Globe Staff / May 13, 2009
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If Massachusetts cities and towns have trouble paying their bills now, it would be much worse next fiscal year under a new state budget that Senate lawmakers will propose today.

The Senate's fiscal 2010 budget would slash local aid by another $356 million, further drain the state's reserve account, and cut nearly every area of state government, from homeless shelters to Boys and Girls Clubs.

The cut to noneducation local aid would represent a 30 percent reduction, following a trend of the state passing on its fiscal pain to local communities in the past year. The move would force cities and towns to lay off more police and firefighters and add more fees for such basic services as trash collection. Education funding, called Chapter 70, would be at the same levels as this fiscal year, according to two sources briefed on the budget. The fiscal year begins July 1.

The budget contains no new tax revenues, but it is sure to fuel demands by human service advocates and unions for tax increases along the lines of a House-approved sales tax increase from 5 percent to 6.25 percent.

"It's not a pretty picture," Senator Steven C. Panagiotakos, chairman of the Senate Committee on Ways and Means, said in an interview. The full Senate will debate the budget next week.

"There is going to be, in every area, people concerned about the level of funding in these areas," he said. "But given the amount of money we had to work with, it is an accurate assessment of the dismal revenue picture."

The $26.7 billion budget proposal is $1.3 billion less than the budget proposal the House approved less than two weeks ago and about $1.4 billion less than the budget lawmakers initially agreed to for this fiscal year.

General local aid was funded at $1.3 billion at the beginning of this fiscal year, but Governor Deval Patrick cut $128 million from the account in January. The final House budget approved earlier this month funded local aid at about $1.1 billion. The Senate proposal being outlined today would fund local aid at about $830 million.

Panagiotakos also said there would be serious cuts to healthcare spending, although he would not say whether they would jeopardize the state's landmark commitment to extending coverage to all state residents. About $47 million in costs that the state currently pays for childhood vaccines would instead be passed on to healthcare providers under the budget proposal, he said.

"I'm speaking at an event [tonight] for Boys and Girls Clubs, and they took out the funding," Senate President Therese Murray said in a brief interview. "There's mental health, there's developmental disability. You name it, there isn't a place in there that's good."

When asked whether there would be any new taxes, Murray said, "I have heard no clamoring."

Murray can expect to hear clamoring from many quarters in coming days. Seventy-seven line items have been completely eliminated, and there are no earmarks in the budget. There are about $2.4 billion in cuts as measured by what it would cost to maintain current services.

The Senate plan would eliminate funding for the Quinn Bill, a controversial program that protects pay bonuses for police officers who hold college degrees. The House also initially eliminated funding but later voted to restore about $25 million, about half of what is being spent on the program this year.

The budget proposal would cut funding used to update election equipment and pay for historic preservation projects, which would place the state below federally-mandated levels and limit the amount of federal funds. The Senate plan would also cut in half the $2 million that had been dedicated to helping the state maximize its population count as part of next year's US Census.

"I'm disturbed about the money, but I understand it," said Secretary of State William F. Galvin. "I'm more puzzled about the choice of cuts because they seem to be in areas that are going to jeopardize federal funds and our federal congressional representation."

The Senate budget would use another $299 million from a state reserve account, which would reduce it to about $500 million. It would rely on another $1.1 billion in federal stimulus money to restore balance.

As in the House, legislators in the Senate did not embrace or reject tax increases while the budget proposal was produced. In the end, House leaders approved the sales tax increase with a veto-proof 108 votes. The House originally proposed a $27.4 billion budget but later added about $600 million using money anticipated from a sales tax increase.

Senators have been divided over whether to follow the House proposal to raise the state sales tax to 6.25 percent or to take a different approach. House lawmakers have estimated that raising the sales tax would bring in as much as $900 million, with about $275 million dedicated to transportation needs.

Other options discussed by senators have included raising the state's gas tax by 5 cents per gallon or eliminating the sales tax exemption on gasoline and dedicating the proceeds to transportation needs.

Top Senate lawmakers have opposed any income tax increase and have said the governor's proposals to increase taxes on alcohol and candy would not raise enough money.

An informal Globe poll this week of the 40 senators indicated that few are willing to take a strong stand for or against new taxes to repair the recession-ravaged budget. The Globe asked all senators to respond to an informal survey on whether they would support raising taxes at all and which specific ones they would support.

Few responded at all, and several senators, who are known to discuss issues for hours on end, hedged in interviews.

"I'm not going to give you a specific answer," said Senator Marc R. Pacheco, a Taunton Democrat.

"We need to do something, but I don't know that there's a consensus at this moment," said Senator Stanley C. Rosenberg, a Northampton Democrat. "Some people are saying we should only do income. Some say gas, no tolls. Some say sales, no income. It's a mixed bag."

Matt Viser can be reached at maviser@globe.com.